Citi’s Montagu Warns US Tech Rally at Risk From Profit Taking

Core Viewpoint - US technology stocks are facing increasing risks as investors look to capitalize on this year's record-breaking rally, particularly affecting the Nasdaq 100, which has surged 46% since April due to enthusiasm around artificial intelligence advancements [1][2]. Group 1: Market Performance - The Nasdaq 100 reached a new record following Advanced Micro Devices Inc.'s significant deal with OpenAI [2][3]. - The index has closed at a record 30 times this year, surpassing last year's total of 45 closing peaks [3]. Group 2: Investor Sentiment - Profit-taking risks have escalated across markets, especially for the Nasdaq, which may hinder further gains [2]. - Bullish sentiment among Goldman Sachs clients is at its highest since December, with 40% expecting the S&P 500 to outperform this month [4]. - A sentiment tracker from Barclays indicates exuberance, while a Bloomberg Intelligence measure has returned to a "manic" zone, historically linked to modest returns [4]. Group 3: Investment Positioning - Citi's weekly snapshot indicates a resurgence in risk flows for US equities, with new long positions gaining traction [5]. - There is an increase in bullish positioning for both large and small-cap stocks [5].